Walking Away From the Cliff

Traders are focusing on the poor action in Apple (AAPL) this morning, in large part because there isn't much else going on. The indices have a slightly negative bias, as does breadth, but it is just painfully slow. There is a lot of random action again as we remain on fiscal-cliff watch.

I've talked with a few fund managers who are shutting down for the year as they have little interest in trying to game the fiscal cliff. They don't like the idea of missing a relief rally if a deal is made, but it is just too difficult to do much positioning for the news.

What is particularly frustrating about this market is that there is so little trading action. In the old days, before the crash of 2008-09, some of my best trading came in flat markets like we've seen the last couple of weeks. The hot stocks would tend to stand out and I was usually pretty good at finding them early enough to catch a good move.

For some reason we no longer see the market act in that manner. My guess is that it has a lot to do with the exodus of individual traders and the move toward program trading that gives individual stock picking less weight.

There still is some hot action to be found but it's narrower and often doesn't last as long. A couple I'm looking at this morning are AVEO Pharmaceuticals (AVEO) and Synergy Resources (SYRG), both of which had some insider buying. Perhaps a macro is buying stocks on that basis. In any event, it continues to be a market offering little edge, so we just have to keep grinding and wait for something to happen.

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